* Some investors are betting stock and bond prices will stay steady even as the Federal Reserve prepares to potentially trim its monetary stimulus. Despite widespread expectations that the Fed will announce a trimming of a bond-buying program aimed at pushing down interest rates and propping up the economic recovery, fund managers have been in a buying mood lately.

* Walgreen is set to become one of the largest employers yet to make sweeping changes to company-backed health programs. On Wednesday, the drugstore giant is expected to disclose a plan to provide payments to eligible employees for the subsidized purchase of insurance starting in 2014. The plan will affect roughly 160,000 employees, and will require them to shop for coverage on a private health-insurance marketplace

* JPMorgan Chase is preparing to pay at least $800 million in fines related to the "London whale" trading fiasco, but that won't solve all the bank's problems with regulators and prosecutors over the matter.

* The British government notched a small profit selling part of its 39 percent stake in Lloyds Banking Group, marking a turnaround not just for Lloyds, which was nearly capsized by bad loans during the financial crisis, but also for CEO António Horta-Osório.

* Microsoft moved to share more of its cash hoard with shareholders, boosting its quarterly dividend by 22 percent and renewing a $40 billion authorization to buy back its shares. The announcement comes two days before a highly anticipated meeting with financial analysts.

* A software problem that briefly halted U.S. options trading Monday originated from a system update rolled out earlier that day, according to officials for NYSE Euronext which manages the system. Monday's problem struck the Options Price Reporting Authority, or OPRA, which provides the benchmark data feed for U.S. options trading, delivering to traders quotes and prices from all 12 options exchanges.

* The head of operations at NYSE Euronext, which manages the data feed that brought down the options market for a brief period of time on Monday, says that market participants can and should do a better job of managing technological change. The public should not, however, expect market technology to function perfectly-a goal that would be too expensive to implement even if it were technically feasible.

* JPMorgan Chase already refunded credit card customers for missteps that are expected to be part of a settlement with regulators later this week, according to people familiar with the situation.

* Companies are increasingly choosing to generate their own power, rather than buying it from a utility, spurred by falling prices for solar panels and natural gas, and fears of outages.

FT

JPMorgan Chase Chief Executive Jamie Dimon told staff in a memo on Tuesday that getting rid of non-core business units, especially those with legal or regulatory risks, was currently a "key initiative" in simplifying the bank's structure.

German automaker Volkswagen said it was going to invest about 150 million euros ($200.23 million) in Brazil by 2015, targeting the nation's increasingly affluent consumers with plans to build its luxury Audi cars there.

A South Korean official said Boeing's F-15 Silent Eagle was the only aircraft with a low enough price-tag to make it eligible to win the country's largest-ever defence import programme, its 8.3 trillion won ($7.66 billion) fighter jet tender.

Tesla's billionaire Chief Executive Elon Musk said the electric carmaker was joining the bandwagon to building cars that can drive themselves.

Electronic Arts, the video games publisher that made Fifa Soccer and Madden NFL, has named the head of its sports unit, Andrew Wilson, as its new chief executive, replacing John Riccitiello who stepped down in March.

NYT

* Among the most troubling questions facing consumers as they shop for insurance under the Obama administration's new health care law is whether the plans will cover the drugs they take - and how much they will have to pay for them. But with less than two weeks remaining until enrollment opens on Oct. 1, the answers are still elusive and anxiety is growing for consumers whose well-being depends on expensive medications.

* With federal prosecutors in Manhattan facing a December deadline to bring additional charges connected to Bernard Madoff's multibillion-dollar Ponzi scheme, they are weighing criminal charges against several people connected to the case, said people briefed on the investigation. Among those still under scrutiny are Shana Swanson, a senior executive at the firm, and Paul Konigsberg, a longtime accountant in Madoff's inner circle.

* The Obama administration announced on Tuesday that it was extending minimum wage and overtime protections to the nation's nearly two million home-care workers. Advocates for low-wage workers have pushed for this change, asserting that home-care workers, who care for elderly and disabled Americans, were wrongly classified into the same "companionship services" category as baby sitters - a group that is exempt from minimum wage and overtime coverage.

* Federal prosecutors have portrayed Julien Grout as the quintessential Wall Street criminal, accusing the former JPMorgan Chase & Co trader of "systematically and fraudulently" masking losses to protect his bonus. His lawyer found another way to describe him: as a scapegoat.

* As the White House and Congress careen toward another fiscal showdown, the nonpartisan Congressional Budget Office warned on Tuesday that President Obama and lawmakers have been cutting the wrong kind of federal spending as they try to avoid the unsustainable buildup of debt that is projected in the coming decades.

* Volkswagen AG, the largest of the European automakers, will bring its first electric car to the United States in two years, joining an increasingly crowded field of battery-powered vehicles on the market. A Volkswagen official said on Tuesday that the e-Golf - an electrified version of the company's subcompact car - would go on sale in 2015 as part of a broader plan to introduce more alternative-fuel models.

* Grocer Safeway Inc has gone on the defense days after activist hedge fund Jana Partners declared a 6.2 percent stake in the company. Safeway said on Tuesday that it had put into place a poison pill plan to prevent investors from acquiring more than 10 percent of the company.

* DE Shaw & Co and Deerfield Management are among a large group of investment firms that have agreed to pay $14.4 million to settle market manipulation charges by the U.S. Securities and Exchange Commission. The regulator accused 23 firms of obtaining "illicit profits" by improperly buying and selling shares, in what is the commission's biggest crackdown since it strengthened a ban on certain short-selling in 2007.

* As the price tag swells for JPMorgan Chase's multibillion-dollar trading loss, Jamie Dimon, the bank's chief executive, offered an unvarnished message to employees on Tuesday. JPMorgan, which is poised to pay roughly $800 million to a host of government agencies, is working to "face our issues, roll up our sleeves, and fix" the compliance and control problems throughout the bank, Dimon said in a company-wide memo on Tuesday.

* The SEC, which has actively pursued actions by American banks and other financial institutions overseas, is broadening its reach by asserting its purview to foreign hedge fund managers. Agency employees are set to pay visits to more than a dozen hedge fund managers registered with the SEC to determine whether they are in compliance with American regulations.

Canada

THE GLOBE AND MAIL

* Quebec's intense debate over restrictions on religious minorities was supposed to peel the blue paint off the walls of the National Assembly to start the fall sitting. But instead of pressing the issue on Tuesday, the three main provincial parties pulled back to survey the changing political landscape.

* The British Columbia New Democratic Party is already debating questions over leadership succession even as it awaits word, expected as early as Wednesday, from Adrian Dix about whether he will step down as party leader. The party, weighed down by debt and still torn apart over its dismal showing in the May provincial election, appears to be far from ready for an expensive and likely divisive leadership contest.

* Toronto is scaling back plans to hike development fees on new homes in a move that will delay the full impact of rate increases and ward off a battle with the development industry. The compromise, outlined in a staff report released Tuesday, would see the fees for a single home or semi jump to C$34,482 ($33,500) from C$19,412. That's a 78 percent increase, but less than the C$37,457 fee proposed in June.

Reports in the business section:

* Some of Canada's biggest retailers are warning that a foreign retail invasion signals what one executive calls a "bloodbath" in Ontario that threatens to spill over into the rest of Canada. Ontario has been ground zero of the retail battle after U.S. discounter Target Corp opened its first Canadian store in the province in March, before moving on to Western provinces.

* Barrick Gold Corp has confirmed plans to add independent directors to its board and review how much it pays its executives amid increased shareholder pressure. The gold producer has faced months of criticism over its weak financial performance, extravagant compensation and the lack of independent mining experts in its boardroom.

* Industry Canada is cracking the whip on wireless carriers, warning them not to talk openly about their strategies for buying spectrum in an upcoming federal auction. Carriers had until noon on Tuesday to submit application papers and a 5 percent deposit to qualify to bid in the auction of the 700 megahertz frequency.

NATIONAL POST

* Federal bureaucrats highlighted negative media coverage as they pressed the Harper government to act quickly on the rapid deterioration of the Champlain Bridge uncovered by inspections warning about the risks of a collapse.

* It has been a week since the Parti Quebecois (PQ) government made public its proposed Charter of Quebec Values, and so far things are not exactly going as planned. On Tuesday, Jean-François Lisee, the PQ minister responsible for Montreal, admitted as much when he invited the public to submit ideas on how the charter - a year in the making - could be made more palatable. "We're looking at ways to improve the proposal," he said.

* On Monday, staffers in the offices of Liberal MPs across the country started tracking their bosses' travel and hospitality expenses, preparing to post them online this time next month.

FINANCIAL POST

* The Ontario Teachers' Pension Plan Board is among 23 firms caught in a targeted sweep by the U.S. Securities and Exchange Commission for short-selling violations ahead of public offerings. The specific rules at the heart of the SEC sweep are aimed at preventing short selling that can artificially depress the market price in the days ahead of the pricing and, therefore, reduce proceeds from public offerings.

* One of Canada's best-known mining executives, Goldcorp Inc chairman Ian Telfer, is seeking to settle allegations brought against him by the Ontario Securities Commission. Telfer was not accused of insider tipping or trading. Instead, the OSC alleged that he acted "contrary to the public interest" by helping an old friend, the executive assistant to the chairman of GMP Securities LP, disguise her scheme.

* Barely a dozen years ago, Alberta was producing so much natural gas the resource was the mainstay of the provincial economy and a big reason Canada was the second-largest natural gas exporter on the planet. Today, Alberta gas is dirt cheap and is struggling to find a home, pushed to the sidelines by shale gas discoveries in the United States and competition from British Columbia.

China

SHANGHAI SECURITIES NEWS

- The China Securities Regulatory Commission approved a house price refinancing programme submitted by a developer last week, according to sources with knowledge of the matter. A number of other developers have also submitted materials in support of similar refinancing programmes and are awaiting approvals.

- The China Securities Regulatory Commission launched a rating system to rate financial advisers engaged in mergers, acquisitions and restructurings.

SHANGHAI DAILY

- Ge Wenyao, chairman of Shanghai Jahwa United Co Ltd resigned on Tuesday following a dispute with the firm's major shareholder Ping An Insurance Group Co of China Ltd , which rejected Ge's proposal to invest in Seagull Watch.

CHINA DAILY

- Yiwu's government on Tuesday released financial reform plan that aims to develop the city into a financial trading hub for local exporters. The plan includes a trial programme for individual cross-border yuan trade settlements.

PEOPLE'S DAILY

- Role models are important as they help set high standards, said an editorial in the paper that acts as the government's mouthpiece.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Becton Dickinson (BDX) upgraded to Overweight from Neutral at Piper JaffrayCognizant (CTSH) upgraded to Overweight from Equal Weight at BarclaysColgate-Palmolive (CL) upgraded to Overweight from Equal Weight at BarclaysConsolidated Edison (ED) upgraded to Neutral from Sell at GoldmanFederal Realty (FRT) upgraded to Buy from Hold at JefferiesHCA Holdings (HCA) upgraded to Buy from Neutral at MizuhoInterpublic Group (IPG) upgraded to Hold from Underperform at JefferiesMaxwell (MXWL) upgraded to Overweight from Neutral at Piper JaffrayNationstar (NSM) upgraded to Buy from Hold at JefferiesNokia (NOK) upgraded to Outperform from Neutral at Credit SuisseOil States (OIS) upgraded to Market Perform from Underperform at BMO CapitalPSEG (PEG) upgraded to Outperform from Sector Perform at RBC CapitalResponsys (MKTG) upgraded to Overweight from Equal Weight at Morgan StanleySabra Health Care (SBRA) upgraded to Buy from Hold at JefferiesServiceNow (NOW) upgraded to Overweight from Equal Weight at Morgan StanleySynchronoss (SNCR) upgraded to Neutral from Sell at GoldmanTilly's (TLYS) upgraded to Overweight from Neutral at Piper JaffrayVipshop (VIPS) upgraded to Buy from Hold at Deutsche BankWeatherford (WFT) upgraded to Outperform from Market Perform at Wells Fargo

Downgrades

Acuity Brands (AYI) downgraded to Neutral from Buy at UBSArQule (ARQL) downgraded to Neutral from Buy at CitigroupBioMarin (BMRN) downgraded to Hold from Buy at StifelCaterpillar (CAT) downgraded to Neutral from Outperform at RW BairdClorox (CLX) downgraded to Underweight from Equal Weight at BarclaysExelon (EXC) downgraded to Sector Perform from Outperform at RBC CapitalGAMCO Investors (GBL) downgraded to Underperform from Neutral at BofA/MerrillIntuit (INTU) downgraded to Underweight from Equal Weight at Morgan StanleyJames River Coal (JRCC) downgraded to Underweight from Hold at BB&TJoy Global (JOY) downgraded to Neutral from Outperform at RW BairdNRG Energy (NRG) downgraded to Neutral from Conviction Buy at GoldmanProcter & Gamble (PG) downgraded to Equal Weight from Overweight at BarclaysTanger Factory (SKT) downgraded to Hold from Buy at JefferiesTower Group (TWGP) downgraded to Market Perform from Outperform at FBR CapitalTransDigm (TDG) downgraded to Sector Perform from Outperform at RBC CapitalViroPharma (VPHM) downgraded to Neutral from Buy at BofA/Merrill

Initiations

AT&T (T) initiated with an Outperform at Credit SuisseApproach Resources (AREX) initiated with an Outperform at Northland SecuritiesAruba Networks (ARUN) initiated with an Overweight at Piper JaffrayDiamondback Energy (FANG) initiated with an Outperform at Northland SecuritiesFrank's International (FI) initiated with a Buy at CitigroupFrank's International (FI) initiated with a Buy at UBSFrank's International (FI) initiated with a Neutral at GoldmanNorthstar Realty (NRF) initiated with an Outperform at Keefe BruyettePhillips 66 Partners (PSXP) initiated with a Neutral at CitigroupQEP Midstream Partners (QEPM) initiated with a Neutral at CitigroupResolute Energy (REN) initiated with an Outperform at Northland SecuritiesSAExploration (SAEX) initiated with a Buy at CanaccordSolarCity (SCTY) initiated with a Neutral at RW BairdSprint (S) initiated with an Underperform at Credit SuisseT-Mobile (TMUS) initiated with an Outperform at Credit SuisseVerizon (VZ) initiated with a Neutral at Credit SuisseWorld Point Terminals (WPT) initiated with a Neutral at Citigroup

From big-box retailers to high-tech manufacturers, more companies across the country are producing their own power, sending a shudder through the utility industry (AEP, DUK, EXC, ETR), threatening its revenues and growth prospects. State and federal regulators say they are worried that utilities could end up with fewer customers to pay for costly transmission lines and power plants, the Wall Street Journal reports

Rising healthcare costs and a climate of change brought about by the new federal health law are prompting American corporations to revisit the pact they've long had with employees over medical benefits. Walgreen (WAG) will today become one of the largest employers yet to make sweeping changes to company-backed health programs, the Wall Street Journal reports

A crackdown on corruption in China's pharmaceutical sector has hurt sales at international (GSK) and local firms, with many doctors at Chinese hospitals refusing to see drug representatives for fear of being caught up in the widening scandal, Reuters reports

Buick customers in the U.S. and China could see more European design and engineering in an expanded range of new models by 2020, as GM (GM) more closely integrates global product development between Buick and GM's German brand Opel, Reuters reports

The Fed today is expected to begin its long retreat from ultra-easy monetary policy by announcing a small reduction in its bond buying, while stressing that interest rates will remain near zero for a long time to come, Reuters reports

Wall Street banks, facing a drop in Q3 trading revenue, are counting on today’s Fed announcement to spark a surge in volume. Banks including JPMorgan Chase (JPM) and Barclays (BCS) have indicated to investors that trading revenue for the period probably will be down from a year earlier, Bloomberg reports